The formula to calculate the Price Elasticity of Demand is:
\[ \text{Price Elasticity of Demand} = \frac{\text{Percentage Change in QD}}{\text{Percentage Change in Price}} \]
Where:
Price elasticity of demand is the degree to which the effective desire for something changes as its price changes.
Let's assume the following values:
Using the formula:
\[ \text{Price Elasticity of Demand} = \frac{4}{9} \]
Evaluating:
\[ \text{Price Elasticity of Demand} = 0.44 \]
The Price Elasticity of Demand is 0.44.
| Percentage Change in QD | Percentage Change in Price | Price Elasticity of Demand |
|---|---|---|
| 3% | 8% | 0.38 |
| 3% | 8.5% | 0.35 |
| 3% | 9% | 0.33 |
| 3% | 9.5% | 0.32 |
| 3% | 10% | 0.30 |
| 3.5% | 8% | 0.44 |
| 3.5% | 8.5% | 0.41 |
| 3.5% | 9% | 0.39 |
| 3.5% | 9.5% | 0.37 |
| 3.5% | 10% | 0.35 |
| 4% | 8% | 0.50 |
| 4% | 8.5% | 0.47 |
| 4% | 9% | 0.44 |
| 4% | 9.5% | 0.42 |
| 4% | 10% | 0.40 |
| 4.5% | 8% | 0.56 |
| 4.5% | 8.5% | 0.53 |
| 4.5% | 9% | 0.50 |
| 4.5% | 9.5% | 0.47 |
| 4.5% | 10% | 0.45 |
| 5% | 8% | 0.63 |
| 5% | 8.5% | 0.59 |
| 5% | 9% | 0.56 |
| 5% | 9.5% | 0.53 |
| 5% | 10% | 0.50 |